Mumbai, Aug. 13: The Tatas have put in place a gameplan to make it big in the oil refinery business.

Tata Sons is picking up a 25 per cent stake in Nagarjuna Oil Corporation Limited (NOCL) for Rs 350 crore in the Rs 4,400-crore refinery project at Cuddalore in Tamil Nadu.

The refinery, with a capacity of 6 million metric tonnes per annum, was primarily promoted by Naragjuna Fertilisers and Chemicals Limited (NFCL). Tamil Nadu Industrial Development Corporation Limited (Tidco), the investment arm of the Tamil Nadu government, was the co-promoter.

NFCL, which has already invested Rs 600 crore in the project, will bring in another Rs 100 crore and hold a 50 per cent stake, according to sources.

Tidco and other technological collaborators will hold the remaining 25 per cent. The project will have a debt component of Rs 3,000 crore.

The deal with Tata Sons is expected to be announced next month when the project reaches financial closure. The refinery is scheduled to commence commercial production within 27 to 32 months after that.

It has entered into a memorandum of understanding with IBP and Essar Oil Limited to market its products at home and has obtained a commitment from an international oil company for exports.

It has also entered into an agreement with Mangalore Refinery and Petrochemicals for technical services and for marketing the product both at home and abroad.

The Tata group had already shown interest to ramp up their presence in the oil and gas sector where it is a small player now.

The group had identified Tata Petrodyne, the fully owned, low-profile subsidiary of Tata Sons, involved with exploration and production of crude oil and natural gas, to be the vehicle for the groupís odyssey into oil.

The renewed focus of the Tata group on the oil and gas sector through Tata Petrodyne was established when the latter was brought back into the fold of Tata Sons. The rationale was to facilitate the special attention and large investments from Tata Sons, according to the specifics of the business.

Tata Petrodyne plans to bid for oil and gas exploration blocks under the sixth round of new exploration licensing policy (Nelp-VI). A limited exposure to the sector has prompted the firm to hold talks with domestic and global players for a possible alliance.